Uniform Trust Decanting Act

Section 19501 names this part as the Uniform Trust Decanting Act.

Section 19502 defines the following terms: “appointive property,” “ascertainable standard,” “authorized fiduciary,” “charitable interest,” “charitable organization,” “charitable purpose,” “court,” “current beneficiary,” “decanting power,” “expanded distributive discretion,” “first trust,” “first trust instrument,” “general power of appointment,” “jurisdiction,” “person,” “power of appointment,” “powerholder,” “presently exercisable power of appointment,” “qualified beneficiary,” “reasonably definite standard,” “second trust,” “second trust instrument,” “settlor,” “state,” “terms of the trust,” and “trust instrument.”

Section 19503 specifies that this part applies to an express trust that is irrevocable or revocable by the settlor only with the consent of the trustee or a person holding an adverse interest. This part does not apply to a trust held solely for charitable purposes. In general, a trust instrument may restrict or prohibit exercise of the decanting power.

Section 19504 requires, in exercising the decanting power, an authorized fiduciary to act in accordance with its fiduciary duties, including the duty to act in accordance with the purposes of the first trust. This part does not create or imply a duty to exercise the decanting power or to inform beneficiaries about the applicability of this part.

Section 19505 states that a notice period begins on the day notice is given and ends 59 days after the day notice is given. An authorized fiduciary may exercise the decanting power without the consent of any person and without court approval in compliance with this part.

Section 19508 explains that notice to a person with authority to represent and bind another person under this code or a first trust instrument has the same effect as notice given directly to the person represented.

Section 19509 provides that a person entitled to notice, a beneficiary, or, with respect to a charitable interest, the Attorney General or other person that has standing to enforce the charitable interest, the court may do any of the seven specified actions.

Section 19510 requires an exercise of the decanting power to be made in a writing signed by an authorized fiduciary. The signed writing must, directly or by reference to the notice, identify the first trust and the second trust or trusts and state the property of the first trust being distributed to each second trust and the property, if any, that remains in the first trust.

Section 19511 defines the terms “noncontingent right,” “presumptive remainder beneficiary,” “successor beneficiary,” and “vested interest.” A power of appointment may be general or nongeneral. The class of permissible appointees in favor of which the power may be exercised may be broader than, or different from, the beneficiaries of the first trust.

Section 19512 defines the term “limited distributive discretion.” An authorized fiduciary that has limited distributive discretion over the principal of the first trust for benefit of one or more current beneficiaries may exercise the decanting power over the principal of the first trust.

Section 19513 defines the following terms: “beneficiary with a disability,” “governmental benefits,” “special needs fiduciary,” and “special needs trust.”

Section 19514 defines the terms “determinable charitable interest” and “unconditional.” If a first trust contains a determinable charitable interest, the Attorney General has the rights of a qualified beneficiary and may represent and bind the charitable interest. If a first trust contains a charitable interest, the second trust or trusts may not do any of four specified actions.

Section 19515 allows an authorized fiduciary to not exercise the decanting power to the extent the first trust instrument expressly prohibits exercise of either of two specified powers. Exercise of the decanting power is subject to any restriction in the first trust instrument that expressly applies to exercise of either of two specified conditions.

Section 19516 specifies that, if a first trust instrument specifies an authorized fiduciary’s compensation, the fiduciary may not exercise the decanting power to increase the fiduciary’s compensation above the specified compensation unless either of the specified events occurs.

Section 19517 provides that a second trust instrument may not relieve an authorized fiduciary from liability for breach of trust to a greater extent than the first trust instrument.

Section 19518 states that an authorized fiduciary may not exercise the decanting power to modify a provision in a first trust instrument granting another person power to remove or replace the fiduciary unless any of three specified conditions occurs.

Section 19519 defines the terms “grantor trust,” “nongrantor trust,” and “qualified benefits property.” An exercise of the decanting power is subject to all of the ten specified limitations.

Section 19520 allows a second trust to have a duration that is the same as, or different from, the duration of the first trust.

Section 19521 allows an authorized fiduciary to exercise the decanting power whether or not under the first trust’s discretionary distribution standard the fiduciary would have made or could have been compelled to make a discretionary distribution of principal at the time of the exercise.

Section 19522 states that, if exercise of the decanting power would be effective under this part, except that the second trust instrument in part does not comply with this part, the exercise of the power is effective and the specified rules apply with respect to the principal of the second trust attributable to the exercise of the power.

Section 19523 defines the terms “animal trust” and “protector.” The decanting power may be exercised over an animal trust that has a protector to the extent the trust could be decanted under this part if each animal that benefits from the trust were an individual, if the protector consents in a signed writing to the exercise of the power. A protector for an animal has the rights under this part of a qualified beneficiary.

Section 19524 provides that a reference in this code to a trust instrument or terms of the trust includes a second trust instrument and the terms of the second trust.

Section 19525 states that, for purposes of the law of this state other than this part, a settlor of a first trust is deemed to be the settlor of the second trust with respect to the portion of the principal of the first trust subject to the exercise of the decanting power. In determining settlor intent with respect to a second trust, the intent of a settlor of the first trust, a settlor of the second trust, and the authorized fiduciary may be considered.

Section 19526 says that, if exercise of the decanting power was intended to distribute all the principal of the first trust to one or more second trusts, later-discovered property belonging to the first trust and property paid to or acquired by the first trust after the exercise of the power is part of the trust estate of the second trust or trusts.

Section 19527 provides that a debt, liability, or other obligation enforceable against property of a first trust is enforceable to the same extent against the property when held by the second trust after exercise of the decanting power.

Section 19529 explains that this part does not limit a trustee’s ability to petition for instructions or other approval under a trust or to petition for modification of a trust.

Section 19530 contains a severability clause.